Infiniti Says It Expects to Repeat Last Year’s 50% China Growth

Nissan Motor Co. (7201)’s luxury Infiniti
brand said last week it expects to repeat 2013’s increase of
about 50 percent in sales volume in China, its second-biggest
market.

“We expect to see continuous growth from our business in
China,” Johan de Nysschen, president of Infiniti, said in
Beijing on Jan. 11. “I would not at all be surprised to see if
the current 50 percent annual growth may well be repeated during
2014.”

Sales by the Infiniti group jumped 54 percent to 17,108
units in the world’s biggest auto market last year, the Japanese
carmaker said. China will probably become Infiniti’s biggest
market by sales volume by the end of this decade, according to
de Nysschen.

Infiniti expects to begin local production of two long-wheelbase models, the Q50 sedan and QX50 crossover, this year.
Automakers offer stretched versions of their models for China,
as consumers there prefer to be chauffeured and seek more
backseat comfort.

The luxury Japanese automaker targets sales of more than
100,000 units in China within five years, Daniel Kirchert,
managing director of Infiniti China, said in Beijing on Jan. 11.

China levies a 25 percent duty on imported cars, making
them less competitive against locally produced models.

China’s main car association last week forecast that the
world’s biggest automobile market will see slower growth this
year as anti-pollution and austerity campaigns spread.

The country became the first to see domestic sales surpass
20 million units a year, and will see deliveries rise as much as
10 percent in 2014 after last year’s 14 percent growth,
according to the state-backed China Association of Automobile
Manufacturers.

Nissan Sales

While China may already be the world’s biggest auto market,
the country has plenty of room to grow as the number of vehicles
on its roads only account for about 6 percent of the population,
versus 80 percent in the U.S. and 36 percent in South Korea,
according to data compiled by Bloomberg.

Nissan’s sales in China last year climbed to 1.27 million
units, trailing only Volkswagen AG and General Motors Co. among
foreign makers. It was followed by South Korea’s Hyundai, whose
deliveries climbed about 20 percent to exceed 1 million for the
first time, according to company figures compiled by Bloomberg.

While China’s motorization has been a boon for foreign
automakers, pressure is building on the government to step in as
pollution and traffic congestion worsens. That’s prompted more
Chinese cities to introduce restrictions on vehicle purchases.

The northern Tianjin municipality began restricting its car
population this year, joining Beijing, Shanghai, Guangzhou and
Guiyang in imposing vehicle quotas.

“Vehicle sales in China are facing pressures brought on by
environmental protection, traffic jams and more cities limiting
purchases,” Shi Jianhua, a vice secretary general at the auto
association, said in Beijing. “Demand for imported luxury
vehicles will surely decline as the official frugality campaign
spreads beyond the government and affect companies and
individual consumers.”